Which of the Following Statements About Floating-Rate Preferred Stock Is

question 5

Multiple Choice

Which of the following statements about floating-rate preferred stock is correct?

• A)its dividends increase as interest rates increase.
• B)its market price increases at a set rate annually.
• C)it is the only stock issued without a par value.
• D)its dividends are deductible for tax purposes by the paying corporation.

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Definitions:

CEO

Chief Executive Officer; the highest-ranking executive in a company, responsible for making major corporate decisions and managing overall operations.

Board of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a company.

Corporate Level

Corporate level refers to the highest layer of strategic decision-making in an organization that affects the entire company.

Functional Level

The operational level in an organization where specific, routine tasks and procedures are carried out, essential to the execution of organizational strategies.